The Russia Ukraine war had entered its 12th day. Oil price is hitting USD 130 per barrel and the natural gas prices in Europe are soaring high. Grain prices are hitting their upper price limit every day with the fear of supply disruption in fertilizer. Military stocks such as Kratos Defense & Security Solutions, Inc (KTOS) and Lockheed Martin (LMT) are shooting up too.
However, there is an industry that had seen its share price inching up without the notice of the public. This industry is Cyber Security Industry.
Cybersecurity companies are involved in the protection of digital data and devices. They can help an organization monitor its networks for security breaches and respond to cyberattacks when they happen.
Since the full-scale war started, Palo Alto Networks(PANW) had risen by 23.24%, Cloudflare(NET) had risen by 21.44% and CyberArk(CYBR) had risen by 20.88%.
Besides being a proxy to the war, here are some of the trends that would create a long-lasting demand for cybersecurity services beyond the war.
1) Mass adoption of work from home
2) Increased use of Multi-Factor Authentication
3) Continued rise of connected device
4) Increased attacks on cloud services
5) Increased in digital fraud cases
Click the photo for higher resolution.
Researching on cyber security is a tough task for laymen like us and hence, I would invest in a cybersecurity ETF to gain exposure to this industry.
ETFMG Prime Cyber Security ETF (HACK) claims to be the first and largest cyber ETF on the market. It has about $2.2 billion in assets. The portfolio consists of roughly 60 stocks that have a direct or indirect relationship to the cyber industry.
Top holdings include Cloudflare Inc (NET), Cisco Systems Inc. (CSCO), Palo Alto Networks Inc. (PANW), and Fortinet Inc. (FTNT). The expense ratio for HACK is 0.60%, or $60 for every $10,000 invested.
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